Saturday, August 6, 2011

Saving the Moola: Living Within Your Needs, But Below Your Means, Part 1

The year was 2006. We had recently adopted Preston, and I was in the throes of getting my bachelor's degree. We had been living on our own, in Ypsi, for about 9 months. Cue disaster. Jason lost his job. I fractured my wrist at work and underwent surgery to correct the fracture. I was unable to work for three months (thankfully, I received workman comp, but I had been planning to work full time during the summer and earn extra money).

Suddenly, we were sinking. Really, it wasn't suddenly, though. We had been slowly sinking the entire time. We had used no budget - we were in our early 20s and living on our own for the first time. Truly, we had no clue what we were doing. During our year of disaster, we made huge mistakes. Mistakes that until just a year or so ago were still part of our lives, haunting us day and night.

I stand before all of you today, though, happy of where we've come from and where we've gone. The only debt to my name is student loan debt - Jason has none. We own our cars completely.

In short, we've lived and are living within our needs but below our means. When the year of disaster was going on, we were slowly growing and learning the very basics of money. Our main thought, day in and day out, was how to survive. Once we survived, my only thought, and I really mean my only thought, was how do I prevent this from ever happening again. This led to a slight manic in stocking toilet paper, canned tomatoes, pasta sauce and pasta, but let me tell you - those 50 rolls of toilet paper helped me sleep better at night. 

This is how we figured the year of disaster could, in the short term, never happen again: Live on one income. This doesn't mean one of you gets to stay home and twiddle your thumbs, or even stay home and manage the household. Both of you get to work - full-time, and you better be working your butts off. But all of the time, live off one income.

Through the years since then, we've had other months where we had only one income, and I'm so thankful that we had made that decision in 2007 that we were only going to live off one income. We used the second income to pay for our luxe wedding and to fix stupid mistakes we made during our year of disaster. But, at the end of the day, if one of us lost our job, we could live off one income. We only depended on one income. One income paid all the bills, bought the groceries, allowed for car repairs, and bought the very infrequent treat (and treats need to be $10 or less total).

This idea of living off one income or, living within your needs but below your means, can be daunting at first, especially when considering the very true idea that you need to spend money to make money - buying a clothesline to dry clothes instead of using a dryer or buying in bulk to spend less per ounce. The most important thing you need is a budget. Tune in next week for Part 2 - how to create and manage a budget, and we'll be sharing our budget with all of you!

No comments: